QUALCOMM, Inc. (NASDAQ: QCOM) is facing multiple headwinds, according to an analyst at Bank of America Merrill Lynch.

The Analysts

Tal Liani downgraded Qualcomm from Buy to Neutral and reduced his price target from $75 to $70.

The Thesis

Qualcomm's management has used up most opportunities for P&L restructuring, Liani said in a note. Even after this, earnings upside alone can't lead to share price appreciation, and the company has to resolve its ongoing licensing disputes with Huawei and Apple Inc. (NASDAQ: AAPL), he added.

The catch here is the timing of the dispute redressal is uncertain.

Liani said Qualcomm could also be constrained by softening smartphone demand, and accordingly lowered his estimates.

Additionally, BofA doesn't see 5G as a major driver in the foreseeable future, as meaningful device shipments could commence only in 12-18 months. That said, the firm sees near-term support emerging from the company's $16 billion accelerated share repurchase program.

"Share price support is a positive in the near term, but also a negative factor, as past experience indicates that associated stability can reverse after buyback programs end," Liani said.